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vention, first known as the Demonstration Cities concept,

later as the Model Cities program, upon which HUD was creat-

ed and which justified its first years of existence.11

One cannot discount the role played in the development

of this policy and subsequent legislation not only by social

reformers but also by self-interested developers.12  Just as

the original public housing program was inspired, in part,

by Franklin Roosevelt's debt to construction unions and

hard-pressed Depression-era builders, so were HUD rehabili-

tation subsidy programs influenced by a range of financial

interests.  In Boston, for instance, the CEO of the parent

company to Boston Gas headed up a syndicate of investors to

renovate more than 2,000 apartments in the city's Roxbury

ghetto, all of which were, in that heavily subsidized proc-

ess, converted from oil heat to gas.13

The impulse to renovate was flawed in a number of key

ways.  First, the impulse to rehabilitate older housing in

poor neighborhoods incorrectly presumed that, despite the

lower incomes of inner-city residents, federal intervention

could permanently bring older apartment buildings back to

their original, middle-class standards.  Incentives, such as

low-interest mortgages, made renovating or constructing

buildings more attractive than maintaining them.  Thus, many

HUD-financed renovations turned out to be shoddy and short-

lived.  The agency quickly became the owner of many build-

ings left behind by owners who, though they had been lured

by up-front incentives, could not realize long-run profits

from operating the structures as rental properties.  For

example, by 1978, 10 years after HUD began a large-scale

subsidized renovation in older inner-city Boston, it had

been forced to foreclose on or assume ownership of 47 of 115

projects.14  As Irving Welfeld wrote, "Showcase projects had

become jungles."15  The fact that projects were privately

owned should not confuse us into thinking that they were

market driven. Profit-making owner-managers had simply

become the subsidized agents of government.

Second, HUD's approach ignored the historic dynamics of

what Wood had called "the tenement trail," which had been a

path of gradual upward mobility.  One of the great forces of

socialization of poor immigrants is the impulse toward self-

improvement, an impulse to improve one's physical surround-

ings and to move to a better neighborhood.  The plan to

rebuild the ghetto to middle-class standards reflected a

doubt that blacks could make that journey and offered,